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Consumers brace as natural gas price increases by 16 percent

After the rise in petrol and diesel prices, consumers are now bracing for the rise of natural gas prices. Based on the formula-based pricing of natural gas, the price of natural gas had been falling in all of the previous six-monthly revisions. However, this time, it has risen by 16 percent to $2.89 per unit, which is in line with the price of natural gas in international markets. Upward revision has also been witnessed in the price ceiling of gas from various fields. The price ceiling has increased by 13 percent to $6.30 per unit. The new rates, which are calculated based on gross calorific value, will be applicable for the period between October 2017 and March 2018. In the period between April-September 2017, the price of natural gas was $2.48 per unit and the price ceiling for gas from various fields was $5.56 per unit.

Experts said that while the increase in prices would be beneficial for oil companies such as Oil and Natural Gas Corp (ONGC) and Reliance Industries, it would hurt consumers such as households, CNG taxi drivers, industries, etc. In every fiscal, the government announces the rate for natural gas. This is done for both gas derived from ordinary fields and gas that is derived from difficult fields such as the ones that are located in deep sea or high-pressure high-temperature areas. In case of the latter, a maximum rate is fixed by the government.

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